Last week, we crunched some numbers to estimate a market size for Swivel Business. As I was perusing the web for advice on how a web 2.0 start-up should go about doing this, I was hard pressed to find articles that didn't mention the SDRS mailing list (too old-fashioned) or expensive industry reports (too fancy-schmancy corporate). So I thought I would share with you how we went about completing this exercise, Swivel style.
Finding your market size is almost as much about the logic as it is about the data. The first step is to think about the market your product could potentially reach. Then, find the numbers to see how many of those people are out there. For Swivel, our target audience is people who work with data, create charts, and want to share them privately with their company or publicly with the world.
Over the next couple of days I'll be posting different strategies for finding free data on the web and estimating a market size. Stay tuned!
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Hmm. I'm sure there's lots of interesting stuff on the web, but why not stick with the rigor of a sensitivity analysis? You can make a single-pager spreadsheet drop your variables in and then you can tweak it to simulate different scenarios to narrow down what, realistically, your market should be. Yes, no?
Posted by: Huned | January 20, 2009 at 06:18 PM
Hey Huned,
Great suggestion. Finding the market size involves breaking the market down into smaller segments and then building those pieces back up to find the number of potential customers. From what I know, sensitivity analysis is definitely a major part of this process. Estimating the numbers is one way to do it; but it's also nice to have some solid stats on population, labor force, demographics, etc. :)
Posted by: Natalie Glatzel | January 21, 2009 at 01:59 PM